CMS: We will lean on private sector to address costs, disparities

NONA TEPPER / January 11, 2022

The federal government will increase its partnerships with private companies and community groups in 2022 to bridge health disparities and reduce costs for publicly-covered patients, the Centers for Medicare and Medicaid Administrator Chiquita Brooks-LaSure said during the J.P. Morgan Healthcare Conference on Tuesday.

"Our role with the private sector is really partnering and trying to align goals," Brooks-LaSure said, adding that companies like Walmart "absolutely" play a role in lowering drug costs for Medicare, Medicaid, Children's Health Insurance Program and the Affordable Care Act exchange customers.

Among Medicare beneficiaries, she said the most common complaint she hears from members is that drug prices are too high. Brooks-LaSure hoped Congress would give CMS tools for lowering drug prices. The Build Back Better plan includes a provision to allow CMS to negotiate drug prices directly with manufacturers, although the legislation stalled after Sen. Joe Manchin (D-W.Va) said he could not support it over affordability concerns.

"If we don't do something about our drug prices, that will end up limiting the levers we have available for lowering costs," Brooks-LaSure said.

When it comes to innovation, she was encouraged to see California recently introduce a nearly $6 billion program to help the state's most vulnerable Medicaid patients pay for housing, groceries, mold removal and more. The initiative represented a prime example of a large organization leveraging its purchasing power to align multiple payers toward addressing the social determinants of health, Brooks-LaSure added. As CMS deepens its focus on eliminating healthcare disparities, she said the agency will remain mindful that it rewards those organizations that take on risk for patients with multiple acuity levels–and not just those that only insure healthy patients.

CMS officials have hinted that they believed certain value-based models need to be updated to include paying for equity measures.

"The innovation center has tried to put a focus on those providers that disproportionately serve the underserved, the safety net providers," Brooks-LaSure said. "As we are moving into these innovative ways of operating, we will ensure that we're not leaving behind those who actually help the ones with comorbidities who need access to care."

In the employer-sponsored space, companies are increasingly banding together to negotiate healthcare costs for workers, said Dr. Mark McClelland, director of Duke-Margolis Center for Health Policy at Duke University. When it comes to lowering drug prices, he pointed to the success companies have had working directly with drug manufacturers in captiated relationships. The partnerships helped decrease the cost of Hepatitis C treatment, McClelland said.

Ultimately, drugmakers must be held accountable for ensuring their products are affordable and a key way to do that is to have them take on patient risk, he said.

"We need to find ways to get drug manufacturers more invested in these models," he said.

Kaiser Permanente's ability to purchase at scale has helped cut drug costs, but the main way it has decreased these prices is by giving physicians immediate insight into an individual's drug coverage and medication costs through their electronic health record system, said Dr. Andrew Birdman, the integrated system's chief medical officer.

The California-based not-for-profit plans to build out its technology to better capture patient social data that helps address health inequities, Birdman said. It will then share the information back with its employer customers, in a move to address social inequities among individuals who receive employer-sponsored health insurance, he said.

"We're building infrastructure ourselves, not just clinical encounters, but building a network of community-based organizations," Birdman said. "As our providers learn about challenges our members have around some of these social factors, employers can take action steps to deal with it."

The integrated system recently inked a partnership with Morgan Health, a new venture by J.P. Morgan aiming to disrupt employer-sponsored insurance. Launched in mid-2021, the company has so far invested $50 million in primary care provider veda health and is now looking to invest in employee navigation tools, said CEO Dan Mendelson. Morgan plans to measure cost savings in five-year increments, he said–underscoring that companies should not expect to lower the price of their employees' healthcare in just one year.

"There needs to be integration and needs to be an accountable party responsible for the care of patients," Mendelson said. "In most of the country you don't find the Kaiser model. We're building that capability both for CMS as well as in the private sector."